The suit argues that the zoning board violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) in its decision to deny variances for the mosque proposal. It also asserts the zoning board was influenced by "anti-Muslim community animus."

The zoning board in a March meeting denied the Bayonne Muslim's application seeking variances on a mosque for 109 East 24th St. The board voted 4-3 in favor of the application, but the variance failed to pass because it needed a super majority of five votes.

The dissenting voters on the board cited parking and traffic issues, as well as their own opinions on whether the mosque belonged in the area. But the suit argues that these members did not cite sufficient evidence of testimony related to the setback and buffer issues (for which variances were needed).

The proposed mosque generated a fervent reaction from both sides of the issue. The March 6 meeting attracted hundreds of people -- both for and against the mosque.

Meanwhile, another New Jersey town has recently agreed to settle on two federal religious discrimination lawsuits.

Bernards Township, as part of a settlement agreement with the U.S. Attorney's Office for New Jersey and the Islamic Society of Basking Ridge, will pay $3.25 million to the society and its legal firm after it denied the society's proposal to build a mosque, according to court documents.

The society will receive $1.5 million for damages, while $1.75 million will go toward legal fees for the firm representing the society.

The U.S. Attorney's Office for New Jersey alleged in a complaint that Bernards Township violated RLUIPA when it discriminated against the Islamic Society based on its religion and the religion of its members.

"Federal law requires towns to treat religious land use applications like any other land use application," Acting U.S. Attorney Fitzpatrick said in a statement. "Bernards Township made decisions that treated the Islamic Society of Basking Ridge differently than other houses of worship.

The law firm, Patterson Belknap Webb & Tyler -- which is also representing the Bayonne Muslims in their suit -- will donate all attorney fees to charity, according to Adeel Mangi, lead counsel for the case.

"Municipalities around the country should pay close attention to what happened in Bernards Township," Mangi said in a statement. "The American Muslim community has the legal resources, the allies, and the determination to stand up for its constitutional rights in court and will do so."

The Bayonne Muslims declined to comment on both the federal investigation, as well as the recent settlement in Bernards Township.

Under that settlement, the township provided an alternate location for the construction of the mosque.

John "Jay" Coffey II, Bayonne's law director, and Joe Ryan, city spokesman, could not be reached for comment on the federal investigation. When reached last week, Coffey declined to comment on the Bayonne Muslims' lawsuit, citing city policy not to comment on litigation.